Election campaign paradoxes in Russian politics

In the YUKOS affair, two questions interest the media and the business community. The first is strategic: where is Russia going? The second is vital (especially for business executives, of course): who will be next after Mikhail Khodorkovsky?

One reader’s letter to Novoe Vremya magazine proposed a bet on it: “They’ll put someone else away by Christmas. I’m sure of it. Who will it be? Guess.”

And the business community seems to be guessing, despite all Vladimir Putin’s assurances that the YUKOS affair is a one-off investigation, not the start of a campaign to redistribute property, and that a return to the past is impossible.

Apparently, both business and the media are more inclined to believe Deputy Prosecutor General Vladimir Kolesnikov. At a round-table conference held in the Duma on the topic of “Security First,” he promised the oligarchs “forty barrels of arrestees,” so to speak (the term used by the Vremya Novostei newspaper).

The conference was organized by the Liberal Democratic Party of Russia (LDPR) faction, and Kolesnikov publicly expressed regret that under Russian law the longest sentence Khodorkovsky might get is only ten years.

Using figures from Vladimir Kolesnikov’s report, Kommersant-Vlast magazine did some interesting calculations about how much damage Khodorkovsky may have done to the state.

Kolesnikov accused YUKOS of failing to pay $1 billion in tax to the federal treasury. Based on an exchange rate of 29.50 rubles to the dollar, and a minimum monthly wage of 600 rubles, Kolesnikov concluded that due to Khodorkovsky, 49,166,166 state-sector workers had missed out on a month’s pay.

However, Kommersant-Vlast continues, statistics show that in recent years, federal tax receipts have only served to increase the state’s wage debts. For example, in 2001 the budget was getting 163 billion rubles a month in tax revenue, and wage arrears were shrinking at the rate of 145 million rubles a month. In 2002, tax revenue rose to 222 billion rubles a month; but wage arrears suddenly started rising at the rate of 53 million rubles a month. In 2003, the state has been collecting 245 billion rubles a month in taxes, while wage arrears have been rising by 62 million rubles a month.

As Kommersant-Vlast goes on to point out, each additional billion rubles of tax revenue seems to be increasing wage debts by an average of 2.5 million rubles. Taking an academic tone, the magazine concludes: “Using Vladimir Kolesnikov’s methodology, we may assert that paying $1 billion to the federal budget would serve to deprive 123,000 Russian workers of a month’s pay at the miminimum wage.” This looks rather like the “terrible puzzle” of Grigori Oster: tell me, children – how many people would miss out on a month’s pay if Khodorkovsky pays the state not $1 billion, but (God forbid) $3 billion, for example?

Kolesnikov’s demarche led to a great deal of speculation in the papers. The Vedomosti newspaper commented: “Some say the St. Petersburg security and law enforcement people, the ‘specters of the Kremlin,’ were speaking via Kolesnikov, allegedly to test the public response to their further plans for reorganizing life in Russia. Others claim that Kolesnikov was only stating his own opinion, for self-promotion purposes.” According to Vedomosti, the truth is somewhere in between, as usual: “The deputy prosecutor general is a self-appointed ‘spokesman’ for the security and law enforcement corporation, expressing the views generally held within it, with the approval of its leaders.”

Another noteworthy point in Vladimir Kolesnikov’s speech was his criticism of the Central Bank. Kolesnikov said straight out that the nation’s most important bank had turned into “some sort of private company” issuing loans “at high interest rates” and not taking responsibility “for the government’s debts.”

Actually, as Vedomosti reminds its readers, there has been a lot of discussion lately – at the Cabinet’s initiative – of reorganizing the Prosecutor General’s Office and cutting its powers. “And it would be odd if the opposing side didn’t do anything in response.”

And some sources say that Mikhail Kasianov, “a long-time opponent of the Prosecutor General’s Office,” is seeking to head the Central Bank after he steps down as prime minister.

Hence the accusations against the Central Bank, says Vedomosti; it’s an attempt to “scare” the prime minister away from the Central Bank, in which an entirely different faction of the elite may be interested.

The way Kolesnikov virtually predicted Khodorkovsky’s arrest, only three days in advance, is still fresh in everyone’s memory. Many believe this was an attempt to get the head of YUKOS to emigrate, thus leaving the authorities free to do as they please with the oil company.

We cannot rule out that something similar may happen in the case of the Central Bank; unless Mikhail Kasianov changes his plans, “there will be a sequel to Kolesnikov’s latest escapade.”

Yet it is no easy task to figure out what is happening in Russia – or even the direction in which events are heading – based on the statements of senior state officials.

“There probably hasn’t been this much pluralism in Russian politics since the Yeltsin era,” says Nezavisimaya Gazeta. Indeed: “The president demands an end to the hysteria – but he is contradicted; not only by the prime minister, but by common deputy ministers, not even Cabinet members. Responsible figures in the law enforcement agencies are saying that Russia’s major assets ought to be nationalized. At the same time, the Kremlin is guaranteeing that there will be no deprivatization.”

Nezavisimaya Gazeta says the president made a very significant comment at last week’s joint session of the Security Council and State Council presidium: “You should look over here! And listen to what I’m saying!”

According to Nezavisimaya Gazeta, the president’s words were essentially addressed to the whole of Russian society, and should be interpreted as follows: “With an economic and political crisis looming, the citizenry ought to pay especially close attention to the statements of the nation’s leadership, and get information from the direct words of the president and other senior officials, rather than various sources which aren’t always reliable.”

There has been no shortage of such statements of late; the problem is that they often contradict each other.

Nezavisimaya Gazeta even drew up a special table of statements from senior officials: President Vladimir Putin, Prime Minister Mikhail Kasianov, Interior Minister Boris Gryzlov – and Vladimir Kolesnikov, as a representative of the Prosecutor General’s Office.

It’s an impressive assortment. One the one hand, the president declares that “there will be no bargaining over the activities of the law enforcement agencies.” On the other hand, he also insists that a return to the past is impossible (a reference to deprivatization).

At the same time, the prime minister says once again that “arresting people on suspicion of economic crimes is an excessive measure.”

The interior minister (even if he is on a leave of absence for the election campaign) says that “everything connected with the YUKOS case has been done according to the law.”

And Kolesnikov, as mentioned above, expresses his regret: “These charges carry a maximal penalty of only ten years’ imprisonment. Unfortunately, we cannot sentence anyone to a longer term.”

Everyone has to work out for themselves what to make of all these statements. To all appearances, citizens are thoroughly confused by this “unprecedented pluralism” among senior political figures.

Evidence of this can be found in some opinion poll results released by the VTsIOM-A polling agency, headed by Yuri Levada; they are reported in the Novye Izvestia newspaper.

The poll was not dedicated to the fate of the oligarchs, of course (most ordinary citizens don’t like them and don’t care what may become of them); it concerned the performance of the government and the president. Yet there is no less confusion there.

Here are the numbers: 56% of respondents disapprove of the government’s performance, and 48% of respondents say Mikhail Kasianov’s team is incapable of coping with rising prices and falling wages. The number of skeptics regarding the government’s ability to change things for the better any time soon is 46%. Yet only 15% of respondents are dissatisfied with the government’s lack of any plan for getting out of the crisis (a year ago, the figure was 21%).

Thus, it appears that most respondents are not happy with the government; yet they make no demands of it. Have they become convinced that it’s no use relying on the authorities for anything? It’s a sorry result, three weeks before the elections; given such attitudes, we shouldn’t expect high voter turnout.

Attitudes to the president cannot be described as anything other than contradictory either.

On the one hand, 73% approve of Vladimir Putin’s performance. This is a very high figure, of course; but polls in early summer showed 78% approval, and a falling trend is apparent.

On the other hand, the level of trust in the president has risen from 44% in September polls to 47% now. Another trend – but in reverse. What should we conclude: that citizens are trusting the president more, but approving of his actions less?

This is very hard to work out, says Novye Izvestia; all we can claim with any certainty is that Russian citizens “think in paradoxes” and “have a rather contradictory view of the realities around them.”

No surprises there; life in Russia – especially politics, and especially during an election campaign – is full of paradoxes.

One of them, for example, is reflected in the electoral lists of the United Russia party – called the Kremlin-backed party by both its supporters and its opponents. This issue was recently explored by Gazeta.

United Russia’s federal electoral lists are headed by some well-known names: ministers, regional leaders, mayors of large cities. But the paradox is that these people are not actually seeking Duma seats. These candidates have been added to the lists as decoration.

It’s a straightforward maneuver: “Voters see the pretty facade and vote for the people they know. Later on, the VIP candidates turn down the Duma seats they win, and are replaced by people for whom the voters couldn’t have voted, since they simply don’t know them.”

Gazeta predicts that as a result, half of the Duma (“the number of seats United Russia is aiming for”) will be made up of “political nonentities.” Of course, there can be no question of these people acting independently, or taking the opinions of voters into account (the voters didn’t elect them).

And this is by no means the only aspect of party campagins which has led to lively debates in the papers.

The pedantic Central Electoral Commission (CEC) has checked the income and assets declarations submitted by candidates – and found a great many “inaccuracies,” so to speak.

The Agrarian Party – defender of the oppressed peasantry – has the highest number of candidates who attempted to conceal their real incomes and assets: 63 of its candidates, according to Gazeta.

The Communist Party (CPRF) – another party for the deprived workers – is second: 60 of its candidates have some undeclared income or assets. For example, Communist candidate Vasili Altukhov honestly admitted owning a Volga car and T-25 tractor; “but he concealed his ownership of a 1998 model Mercedes Benz S600L – so shameful for a Bolshevik.” Now he will have to provide the CEC with a written explanation. So will his party comrade Nikolai Venediktov, who admitted to owning a UAZ van, but kept quiet about his BMW-745.

What’s more, as the Vedomosti newspaper reports, some joint investigation by the CEC and the Taxes and Duties Ministry “has revealed several covert millionaires in dollar terms.” If we add them to the overt, well-known millionaires – those also on the CPRF electoral lists, for example – then the role of the left-wing opposition in the election campaign may be clarified.

Once again, the YUKOS affair has been the moment of truth for observers here.

Writing in Kommersant-Vlast, Nikolai Vardul asks: “Why has Gennadi Zyuganov spoken out in defense of Khodorkovsky? In a country where a quarter of the population lives below the official poverty line, and 8 million people have nothing in their pension savings accounts, can’t the Communist leader find anyone more appropriate to defend than a class enemy and billionaire?”

According to Vardul, the issue here is that it’s not at all easy to fill the niche of a real opposition – especially since Vladimir Putin declared fighting poverty to be a national priority. If Zyuganov were to speak out for “ordinary citizens who are humiliated and degraded,” some people might remind him of the objectives the president has set: “doubling the GDP” and eliminating poverty.

In Vardul’s view, this is precisely why the CPRF leader has decided to compete for votes with Yabloko and the Union of Right Forces (URF), rather than with United Russia.

What’s more, as everyone knows, the CPRF electoral lists include some people with links to YUKOS. And the former head of YUKOS “is already going down in history as the billionaire who became a political prisoner.”

Here is another paradoxical figure in Russian politics: “the billionaire fighting the regime, locked up in the Matrosskaya Tishina prison.”

Kommersant-Vlast magazine emphasizes that whether Khodorkovsky had any political ambitions, or how high they may have been, is no longer all that important. What matters is that “the Khodorkovsky factor” has become an inseparable component of the election campaign.

Nezavisimaya Gazeta uses “The Nelson Mandela of Matrosskaya Tishina” as the headline for an article on Khodorkovsky: “The influence on Russian federal politics of the entrepreneur locked up in a pre-trial detention center is growing stronger with every day – at the most decisive period of the four-year cycle.”

Nezavisimaya Gazeta quotes CEC chief Alexander Veshnyakov as saying recently that under the law, Khodorkovsky does have the right to run for president. Most likely, says Nezavisimaya Gazeta, the Kremlin strategists themselves are already regretting turning Khodorkovsky into a martyr: “They were probably hoping for a different effect.” However, this has led to “a new agenda for the elections of 2003 and the election of 2004.”

URF co-leader Anatoly Chubais says the Khodorkovsky factor is certain to have an impact on the presidential election most of all. In an interview with Rossiiskaya Gazeta, Chubais said: “In terms of supporting those political forces which are prepared to defend business, I believe the business community will not stop or be frightened. On the contrary, it is likely to become more active.”

Nezavisimaya Gazeta comments that Chubais’s words are a prediction for 2004. Those “oracles” who predicted a dull presidential campaign and recommended thinking ahead to 2008 have been put to shame: “It is already clear that Mikhail Khodorkovsky is becoming an entirely realistic prospect as a presidential candidate representing the united liberals.”

Of course, there is little likelihood of Khodorkovsky winning, or even coming in second. However, Nezavisimaya Gazeta says that 15% of the vote – “the combined electorate of democratically-minded citizens” – may be considered an achievable result.

Such a result would mean a second round of voting. In that case, says Nezavisimaya Gazeta, we might see a repeat of the 1996 situation, when the outcome of the second round depended on Alexander Lebed – who exchanged the support of his voters for the post of Security Council secretary.

Nezavisimaya Gazeta comments: “Whether a similar trump card appears in Khodorkovsky’s hand, and how he would play it if it does, is a different matter. In any case, the 2004 election could provide him with an excellent run-up for the presidential race of 2008; unless the Constitution is amended by then, of course.”

Actually, there are already some other candidates – for 2004 as well as 2008.

Writing in Moskovskie Novosti, former NTV director Igor Malashenko says: “Khodorkovsky may run for president. He probably ought to do so, in self-defense.”

However, Malashenko believes Khodorkovsky’s chances would be slim: in the view of “the vast majority of Russian citizens,” he is “excessively rich” and made his multi-billion-dollar fortune from “unjust privatization.” Malashenko adds: “And besides, he’s Jewish, which has never been an advantage for anyone in Russia.”

That very same majority of voters dislikes Chubais; but Malashenko believes this can be corrected. Yes, “people get very emotional” about Chubais, and its “in a negative way, so far.” However, Malashenko says it’s much easier to transform negative into positive than it is to generate strong emotions from nothing.

Malashenko says: “If Chubais isn’t afraid to challenge Putin, a fair number of people would change their opinions of him.”

As in the hypothetical Khodorkovsky scenario, there would be no question of Chubais being able to win. Malashenko admits that a realistic target would be no more than 10-12% of the vote: “But this would turn Chubais, and the URF, and any other parties that aren’t afraid to support him, into a real political force – rather than just being decorative.”

Andrei Kolesnikov, well-known journalist and author of a book about Chubais, generally agrees with Malashenko.

Some extracts from Kolesnikov’s book have been published in Moskovskie Novosti. Kolesnikov says: “Over the next two political cycles, Chubais’s charisma may experience some unusual adventures and evolve in surprising ways.”

Like Malashenko, Kolesnikov believes that it’s a short step from love to hatred. Of course, changes in the opposite direction are rather rare. “However, by the end of the first decade of the new century, a change of generations will be underway. The voting preferences and political behavior of the new generation of voters remain a mystery as yet.”

So anything is possible – including the prospect of “Chubais acquiring a role in elections.”

One way or another, as the parliamentary race enters its final stage, the YUKOS affair has become an important aspect of the campaign. Yulia Latynina, an observer for Yezhenedelnyi Zhurnal, points out that Russia’s chief paradox lies in the fact that fighting oligarchs during an election campaign has turned out to be an exceptionally disadvantageous move.

On the one hand, says Latynina, “the arrest of Khodorkovsky has been like a red rag to a bull for the elite. It would be hard to imagine any other move that could instantly turn an oligarch into a political figure, split society, and lead to the president being criticized for the first time.”

And the ordinary voter situation isn’t all that simple either. “If state officials believe the people will vote in favor of taking everything away from oligarchs and giving it to state officials, then the state officials must really think voters are gullible fools.”

Latynina predicts that if voters are stirred up by extremist slogans, they will not vote for state officials at all: “They will vote for extremists.”

In short, it’s turned out that the YUKOS affair wasn’t politically necessary at all. The president’s approval rating was already high. But now Khodorkovsky’s rating has risen as well. What’s more, in an unexpected development for many, the press has started discussing the topic of an alternative candidate to Vladimir Putin in the presidential campaign.

Not that long ago, speculations on that topic were only coming from Boris Berezovsky.

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